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How energy sector shut its doors to the public

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by Moshahida Sultana Ritu

Earlier this month, the five percent electricity price hike and 78.2 percent gas price hike by the Energy and Mineral Resource Division raised concerns about the accountability of the government, and consumer rights. The December 2022 amendment of the Bangladesh Energy Regulatory Commission (Berc) Act 2003 empowered the government to set power and energy tariffs on its own under “special circumstances,” without a public hearing by the Berc. Before the amendment, any price hike proposals used to be considered by the Berc after a public hearing, during which residential consumers, businesspeople, bureaucrats, civil society members and rights-based organisations could express their opinions. Hence, there was at least a mechanism to invite public opinion. Now, the door has been closed to any discussion.

The amendment Bill was placed in Parliament on January 22 to be vetted, and will be passed in the next few days. The government is justifying the amendment by citing the present situation as an emergency period or special circumstance.

I would call this a textbook example of “regulatory capture.” George Stigler first introduced this term in the 1970s. Stigler argued that governments do not create a monopoly in industries unintentionally. Rather, they deliberately protect the interests of producers who capture the regulatory agency, and use regulations to inhibit competition. The result of such monopolies – in the name of liberalisation and competition – is often a transfer of public resources to private producers through price hikes, and at the expense of exorbitantly high social costs.

When electricity liberalisation began in the 1990s, electricity regulatory bodies were created in many countries to protect public interest. Regulatory bodies were seen as safeguards against uncontrolled market price hikes as private electricity producers intended to maximise profit. Following the global neoliberal trend, Bangladesh also established the Berc in 2003.

In the past, Berc, bestowed with the regulatory power to act in the public’s interest, set the tariff in ways that may have benefitted private power producers in different ways. But there was at least a mechanism of accountability, no matter how ineffective the role it played in protecting public interest. The recent decision of taking the power away from Berc and empowering the Energy and Mineral Resource Division to set prices reveals that the government does not feel the need to hear the public’s voice anymore. Even if they claim they care about public opinion, this is a sham statement.

Before the gas price hike in the industrial and commercial sectors, the media was flooded with the information that businesspeople were ready for a price hike because of the desperate need for gas to continue production. It may seem that the government has actually heard their voices and decided to increase gas prices so that LNG can be imported with the additional revenue. In reality, we are still in limbo about understanding how the government will pay the dollar amounts for imported LNG. Dwindling forex reserves have already brought up so many examples of our inability to pay for imported energy that it is difficult to understand how it will be used to meet essential import demands.

Because of dwindling forex reserves, not only has the import of LNG become uncertain, but so has the import of coal for Rampal and Matarbari power plants. Unless potential avenues are opened up to ensure an inflow of foreign currency, how will the government pay? The absence of new dollar-earning sources worries us. If there had been a public hearing regarding the recent gas and electricity price hikes, this question could have been discussed in public. Concerned citizens could have asked about the government’s plans.

The fact that the price of gas did not increase for residential users this time around gave off a false impression that the price hike would only affect businesses, and not residential users. The whole focus was put on the demands of industrialists, who have been endlessly suffering from a gas crisis. There is no doubt that their concerns need to be addressed. But how can we ignore the potential effects of the gas price hike on the power sector, which will ultimately impact the whole population?

Gas price hikes in the power sector will eventually put further upward pressure on electricity prices. Sooner or later, residential users will be affected. Besides, existing inflation will soar as a result of increased costs of production in industries. Eventually, all will be affected. But where and to whom do we pose this question?

Berc is no longer functional, although its functionality in the past was already questionable. Despite having the capacity, why was Bapex not given the responsibility to drill wells, and why was the Russian company Gazprom appointed to construct wells instead, at a cost three times higher than what Bapex had offered? Why were “gas funds” – created with revenue generated from previous price hikes and intended to be used for the development of local gas – loaned out to import LNG? Why did the government not utilise the gas funds to extract onshore and offshore gas?

For these answers, we used to wait for public hearings where activists, politicians, experts, and the Consumer Association of Bangladesh (CAB) could question the concerned authorities.

Now, with the excuse of a crisis, the government has decided to take decisions that are more non-transparent, more controversial, and less justifiable than ever before. Slamming the door on our queries is what the government has decided to do instead, with its December 2022 amendment to the Berc Act.

It is definitely telling that the phenomenon of “regulatory capture” has existed in the past in different forms when the process of power liberalisation started in Bangladesh in the 1990s. The independent power producers (IPPs) started to produce electricity at high costs, compared to publicly owned plants. Using the power crisis as its excuse, the government facilitated IPPs.

In the last three years, IPPs were paid nearly 60 percent of the capacity charges from the revenue earned from selling electricity. Similarly, when the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010 (QEEES) was enacted, rental and quick rental power plants started operating by bypassing competitive bidding and selling electricity at exorbitantly high rates. Over the last 10 years, the capacity charges for private power plants has become so high that it exemplifies how private producers misused the QEEES Act to transfer public money in favour of private gains for rentals and quick rentals.

There is a sharp difference between past examples of regulatory capture (through the QEEES Act 2010 and Berc Act 2003) and the new form of regulatory capture (the December 2022 Berc Act 2003 amendment).

In previous instances of regulatory capture, preventing competition used to be justified with the excuse of crises and for “protecting the interest of the public”. The present “special circumstance” rationale does not recognise the social costs of price adjustment at all. The new form of regulatory capture only ensures producers’ interests by preventing public hearings.

How can the government ensure that a handful of people will take right decisions on behalf of thousands of inflation-affected people? How will we know what is happening behind closed doors?

The Daily Star/ANN

(Moshahida Sultana is associate professor at the Department of Accounting and Information Systems at Dhaka University.)

 



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Features

Ranking public services with AI — A roadmap to reviving institutions like SriLankan Airlines

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Efficacy measures an organisation’s capacity to achieve its mission and intended outcomes under planned or optimal conditions. It differs from efficiency, which focuses on achieving objectives with minimal resources, and effectiveness, which evaluates results in real-world conditions. Today, modern AI tools, using publicly available data, enable objective assessment of the efficacy of Sri Lanka’s government institutions.

Among key public bodies, the Supreme Court of Sri Lanka emerges as the most efficacious, outperforming the Department of Inland Revenue, Sri Lanka Customs, the Election Commission, and Parliament. In the financial and regulatory sector, the Central Bank of Sri Lanka (CBSL) ranks highest, ahead of the Securities and Exchange Commission, the Public Utilities Commission, the Telecommunications Regulatory Commission, the Insurance Regulatory Commission, and the Sri Lanka Standards Institution.

Among state-owned enterprises, the Sri Lanka Ports Authority (SLPA) leads in efficacy, followed by Bank of Ceylon and People’s Bank. Other institutions assessed included the State Pharmaceuticals Corporation, the National Water Supply and Drainage Board, the Ceylon Electricity Board, the Ceylon Petroleum Corporation, and the Sri Lanka Transport Board. At the lower end of the spectrum were Lanka Sathosa and Sri Lankan Airlines, highlighting a critical challenge for the national economy.

Sri Lankan Airlines, consistently ranked at the bottom, has long been a financial drain. Despite successive governments’ reform attempts, sustainable solutions remain elusive.

Globally, the most profitable airlines operate as highly integrated, technology-enabled ecosystems rather than as fragmented departments. Operations, finance, fleet management, route planning, engineering, marketing, and customer service are closely coordinated, sharing real-time data to maximise efficiency, safety, and profitability.

The challenge for Sri Lankan Airlines is structural. Its operations are fragmented, overly hierarchical, and poorly aligned. Simply replacing the CEO or senior leadership will not address these deep-seated weaknesses. What the airline needs is a cohesive, integrated organisational ecosystem that leverages technology for cross-functional planning and real-time decision-making.

The government must urgently consider restructuring Sri Lankan Airlines to encourage:

=Joint planning across operational divisions

=Data-driven, evidence-based decision-making

=Continuous cross-functional consultation

=Collaborative strategic decisions on route rationalisation, fleet renewal, partnerships, and cost management, rather than exclusive top-down mandates

Sustainable reform requires systemic change. Without modernised organisational structures, stronger accountability, and aligned incentives across divisions, financial recovery will remain out of reach. An integrated, performance-oriented model offers the most realistic path to operational efficiency and long-term viability.

Reforming loss-making institutions like Sri Lankan Airlines is not merely a matter of leadership change — it is a structural overhaul essential to ensuring these entities contribute productively to the national economy rather than remain perpetual burdens.

By Chula Goonasekera – Citizen Analyst

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Why Pi Day?

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International Day of Mathematics falls tomorrow

The approximate value of Pi (π) is 3.14 in mathematics. Therefore, the day 14 March is celebrated as the Pi Day. In 2019, UNESCO proclaimed 14 March as the International Day of Mathematics.

Ancient Babylonians and Egyptians figured out that the circumference of a circle is slightly more than three times its diameter. But they could not come up with an exact value for this ratio although they knew that it is a constant. This constant was later named as π which is a letter in the Greek alphabet.

Archimedes

It was the Greek mathematician Archimedes (250 BC) who was able to find an upper bound and a lower bound for this constant. He drew a circle of diameter one unit and drew hexagons inside and outside the circle such that the sides of each hexagon touch the sides of the circle. In mathematics the circle passing through all vertices of a polygon is called a ‘circumcircle’ and the largest circle that fits inside a polygon tangent to all its sides is called an ‘incircle’. The total length of the smaller hexagon then becomes the lower bound of π and the length of the hexagon outside the circle is the upper bound. He realised that by increasing the number of sides of the polygon can make the bounds get closer to the value of Pi and increased the number of sides to 12,24,48 and 60. He argued that by increasing the number of sides will ultimately result in obtaining the original circle, thereby laying the foundation for the theory of limits. He ended up with the lower bound as 22/7 and the upper bound 223/71. He could not continue his research as his hometown Syracuse was invaded by Romans and was killed by one of the soldiers. His last words were ‘do not disturb my circles’, perhaps a reference to his continuing efforts to find the value of π to a greater accuracy.

Archimedes can be considered as the father of geometry. His contributions revolutionised geometry and his methods anticipated integral calculus. He invented the pulley and the hydraulic screw for drawing water from a well. He also discovered the law of hydrostatics. He formulated the law of levers which states that a smaller weight placed farther from a pivot can balance a much heavier weight closer to it. He famously said “Give me a lever long enough and a place to stand and I will move the earth”.

Mathematicians have found many expressions for π as a sum of infinite series that converge to its value. One such famous series is the Leibniz Series found in 1674 by the German mathematician Gottfried Leibniz, which is given below.

π = 4 ( 1 – 1/3 + 1/5 – 1/7 + 1/9 – ………….)

The Indian mathematical genius Ramanujan came up with a magnificent formula in 1910. The short form of the formula is as follows.

π = 9801/(1103 √8)

For practical applications an approximation is sufficient. Even NASA uses only the approximation 3.141592653589793 for its interplanetary navigation calculations.

It is not just an interesting and curious number. It is used for calculations in navigation, encryption, space exploration, video game development and even in medicine. As π is fundamental to spherical geometry, it is at the heart of positioning systems in GPS navigations. It also contributes significantly to cybersecurity. As it is an irrational number it is an excellent foundation for generating randomness required in encryption and securing communications. In the medical field, it helps to calculate blood flow rates and pressure differentials. In diagnostic tools such as CT scans and MRI, pi is an important component in mathematical algorithms and signal processing techniques.

This elegant, never-ending number demonstrates how mathematics transforms into practical applications that shape our world. The possibilities of what it can do are infinite as the number itself. It has become a symbol of beauty and complexity in mathematics. “It matters little who first arrives at an idea, rather what is significant is how far that idea can go.” said Sophie Germain.

Mathematics fans are intrigued by this irrational number and attempt to calculate it as far as they can. In March 2022, Emma Haruka Iwao of Japan calculated it to 100 trillion decimal places in Google Cloud. It had taken 157 days. The Guinness World Record for reciting the number from memory is held by Rajveer Meena of India for 70000 decimal places over 10 hours.

Happy Pi Day!

The author is a senior examiner of the International Baccalaureate in the UK and an educational consultant at the Overseas School of Colombo.

by R N A de Silva

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Features

Sheer rise of Realpolitik making the world see the brink

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A combined US-Israel attack on Iran.(BBC)

The recent humanly costly torpedoing of an Iranian naval vessel in Sri Lanka’s Exclusive Economic Zone by a US submarine has raised a number of issues of great importance to international political discourse and law that call for elucidation. It is best that enlightened commentary is brought to bear in such discussions because at present misleading and uninformed speculation on questions arising from the incident are being aired by particularly jingoistic politicians of Sri Lanka’s South which could prove deleterious.

As matters stand, there seems to be no credible evidence that the Indian state was aware of the impending torpedoing of the Iranian vessel but these acerbic-tongued politicians of Sri Lanka’s South would have the local public believe that the tragedy was triggered with India’s connivance. Likewise, India is accused of ‘embroiling’ Sri Lanka in the incident on account of seemingly having prior knowledge of it and not warning Sri Lanka about the impending disaster.

It is plain that a process is once again afoot to raise anti-India hysteria in Sri Lanka. An obligation is cast on the Sri Lankan government to ensure that incendiary speculation of the above kind is defeated and India-Sri Lanka relations are prevented from being in any way harmed. Proactive measures are needed by the Sri Lankan government and well meaning quarters to ensure that public discourse in such matters have a factual and rational basis. ‘Knowledge gaps’ could prove hazardous.

Meanwhile, there could be no doubt that Sri Lanka’s sovereignty was violated by the US because the sinking of the Iranian vessel took place in Sri Lanka’s Exclusive Economic Zone. While there is no international decrying of the incident, and this is to be regretted, Sri Lanka’s helplessness and small player status would enable the US to ‘get away with it’.

Could anything be done by the international community to hold the US to account over the act of lawlessness in question? None is the answer at present. This is because in the current ‘Global Disorder’ major powers could commit the gravest international irregularities with impunity. As the threadbare cliché declares, ‘Might is Right’….. or so it seems.

Unfortunately, the UN could only merely verbally denounce any violations of International Law by the world’s foremost powers. It cannot use countervailing force against violators of the law, for example, on account of the divided nature of the UN Security Council, whose permanent members have shown incapability of seeing eye-to-eye on grave matters relating to International Law and order over the decades.

The foregoing considerations could force the conclusion on uncritical sections that Political Realism or Realpolitik has won out in the end. A basic premise of the school of thought known as Political Realism is that power or force wielded by states and international actors determine the shape, direction and substance of international relations. This school stands in marked contrast to political idealists who essentially proclaim that moral norms and values determine the nature of local and international politics.

While, British political scientist Thomas Hobbes, for instance, was a proponent of Political Realism, political idealism has its roots in the teachings of Socrates, Plato and latterly Friedrich Hegel of Germany, to name just few such notables.

On the face of it, therefore, there is no getting way from the conclusion that coercive force is the deciding factor in international politics. If this were not so, US President Donald Trump in collaboration with Israeli Rightist Premier Benjamin Natanyahu could not have wielded the ‘big stick’, so to speak, on Iran, killed its Supreme Head of State, terrorized the Iranian public and gone ‘scot-free’. That is, currently, the US’ impunity seems to be limitless.

Moreover, the evidence is that the Western bloc is reuniting in the face of Iran’s threats to stymie the flow of oil from West Asia to the rest of the world. The recent G7 summit witnessed a coming together of the foremost powers of the global North to ensure that the West does not suffer grave negative consequences from any future blocking of western oil supplies.

Meanwhile, Israel is having a ‘free run’ of the Middle East, so to speak, picking out perceived adversarial powers, such as Lebanon, and militarily neutralizing them; once again with impunity. On the other hand, Iran has been bringing under assault, with no questions asked, Gulf states that are seen as allying with the US and Israel. West Asia is facing a compounded crisis and International Law seems to be helplessly silent.

Wittingly or unwittingly, matters at the heart of International Law and peace are being obfuscated by some pro-Trump administration commentators meanwhile. For example, retired US Navy Captain Brent Sadler has cited Article 51 of the UN Charter, which provides for the right to self or collective self-defence of UN member states in the face of armed attacks, as justifying the US sinking of the Iranian vessel (See page 2 of The Island of March 10, 2026). But the Article makes it clear that such measures could be resorted to by UN members only ‘ if an armed attack occurs’ against them and under no other circumstances. But no such thing happened in the incident in question and the US acted under a sheer threat perception.

Clearly, the US has violated the Article through its action and has once again demonstrated its tendency to arbitrarily use military might. The general drift of Sadler’s thinking is that in the face of pressing national priorities, obligations of a state under International Law could be side-stepped. This is a sure recipe for international anarchy because in such a policy environment states could pursue their national interests, irrespective of their merits, disregarding in the process their obligations towards the international community.

Moreover, Article 51 repeatedly reiterates the authority of the UN Security Council and the obligation of those states that act in self-defence to report to the Council and be guided by it. Sadler, therefore, could be said to have cited the Article very selectively, whereas, right along member states’ commitments to the UNSC are stressed.

However, it is beyond doubt that international anarchy has strengthened its grip over the world. While the US set destabilizing precedents after the crumbling of the Cold War that paved the way for the current anarchic situation, Russia further aggravated these degenerative trends through its invasion of Ukraine. Stepping back from anarchy has thus emerged as the prime challenge for the world community.

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